Wow! Federal Reserve decision is not everything next week! What's ahead? InstaForex talks many economic events (Monday) - 30/10/22

📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!
Exchange Rates 30.10.2022 analysis

 

The last full trading week of October has ended, extremely volatile, during which meetings of three largest world central banks (Canada, eurozone, Japan) took place at once. If the decisions taken by the European Central Bank (ECB) and the Bank of Japan (BOJ) on interest rates coincided with market expectations, then the Bank of Canada made an unexpected decision, surprising investors. The central bank raised its interest rate by 50 basis points to 3.75%, although markets had expected a 75 bps hike. The decision, which appears to have been fueled by growing concerns about the threat of a slowdown in the Canadian economy and a deepening global recession, disappointed market participants and sent the Canadian dollar sharply weaker. Moreover, the head of the bank, Tiff Macklem, said that the central bank is nearing the end of the tightening phase, although further interest rate hikes are still possible.

Next week, market participants will focus on two main and key events: the Federal Reserve (Fed) meeting and the release on Friday of the monthly report of the US Department of Labor for October. In addition, the Reserve Bank of Australia (RBA) and the Bank of England (BoE) will also hold their meetings on monetary policy issues. A lot of important macro statistics for China, Germany, the eurozone, Canada, New Zealand, and the USA will also be published. In other words, the coming week will be even more volatile. But it also carries a ton of trading opportunities.

Take note that next week European countries are switching to winter time: in the trading terminals of forex brokers and in the economic calendar, the time will be shifted back by 1 hour.

Monday 31 October

Australia. Retail sales level

The Retail Sales Level Index is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term.

The growth of the index is usually a positive factor for the AUD; a decrease in the indicator and worse-than-expected data are negative.

Previous index values: +0.6%, +1.3%, +0.2%, +0.9%, +0.9%, +1.6%, +1.8%, +1.8 % (in January 2022). September forecast: -0.2%.

The level of influence on the markets is average.

China. Chinese Federation of Logistics and Purchasing PMI (CFLP) business activity indexes in the manufacturing and services sectors of the Chinese economy

This report is an analysis of a survey of 3,000 purchasing managers, in which respondents are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory. Purchasing managers have perhaps the most up-to-date information about the situation in the company, so this indicator is an important indicator of the state of the Chinese economy as a whole.

Since the Chinese economy is, according to various estimates, the first in the world (at the moment), Chinese macro data can have a big impact on the financial market and investor sentiment, especially on the markets of the Asia-Pacific region.

Data above 50 indicates an increase in activity. The relative growth of the index and values above 50 should have a positive impact on the CNY.

Previous values: 50.1, 49.4, 49.0, 50.2, 49.6, 47.4, 49.5, 50.2, 50.1 (in January 2022) for manufacturing PMI , and 50.6, 52.6, 53.8, 54.7, 47.8, 41.9, 48.4, 51.6, 51.1 (in January 2022) for Services PMI.

Forecast for October: 49.2 and 51.9, respectively.

The level of influence on the markets is medium to high.

Germany. Retail sales

The statistical office of Germany will publish a report with data on retail sales. The change in the indicators of the report on retail sales affects the indicator of consumer spending, indirectly indicating the state of the German economy and the level of income of citizens.

The German economy is the locomotive of the entire European economy. Therefore, euro quotes are very sensitive to the release of important macro statistics for Germany.

A high result usually strengthens the euro, and vice versa, a low result weakens it. Data better than the forecast and/or the previous value is likely to have a positive impact on the euro, but - in the short term.

Previous values: -1.3% (-4.3% YoY), +1.9% (-2.6% YoY), -1.5% (-9.6% YoY) , +1.2% (+1.1% YoY), -5.4% (-0.4% YoY), +0.9% (-1.7% YoY), + 0.2% (+6.9% YoY), -0.2% (+10.1% YoY) in January 2022.

September forecast: -0.4% (annualized).

The level of influence on the markets is medium to high.

Eurozone. GDP for the 3rd quarter (preliminary estimate). Consumer Price Indices in the eurozone (preliminary release)

Eurostat will publish a report with preliminary data on eurozone GDP for the 3rd quarter. There are three versions of the quarterly GDP, published at intervals of approximately 20 days - Preliminary, Updated, Final (final release). The pre-release is the earliest and therefore tends to have the most impact on the markets. This report reflects the general economic performance of the eurozone countries and has a significant impact on the decision of the ECB on monetary policy.

GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on national currency quotes.

This report usually causes an increase in volatility in EUR quotes. It is likely that the release of the report with data on eurozone GDP for the 3rd quarter will be released with positive indicators. Data worse than forecast/previous values will have a negative impact on EUR quotes.

Previous values: +0.8% (+4.1% YoY) in Q2 2022, +0.6% (+5.4% YoY in Q1 2022), + 0.3% (+4.6% YoY) in Q4, +2.2% (+3.9% YoY) in Q3, +2.2% (+14, 3% YoY) in Q2 and a -0.3% drop (-1.3% YoY) in Q1 2021.

The level of influence on the markets is medium to high.

The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services over a given period, being a key indicator for assessing inflation and changing consumer preferences.

In the core consumer price index (Core Consumer Price Index, Core CPI), food and energy are excluded from the calculation for a more accurate estimate.

Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. A reading lower than forecast/previous could trigger a weaker euro as low inflation forces the ECB to stay loose on monetary policy. Conversely, rising inflation and its high level will put pressure on the ECB to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency.

Previous CPI values (annualized): +9.9%, +9.1%, +8.9%, +8.6%, +8.1%, +7.4%, +7.4 %, +5.9%, +5.1% (in January 2022).

Previous Core CPI values (annualized): +4.8%, +4.3%, +4.0%, +3.7%, +3.8%, +3.5%, +3, 0%, +2.7%, +2.3% (in January 2022).

The level of influence on the markets (preliminary assessment) is high.

Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Read more: https://www.instaforex.eu/forex_analysis/325632

📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

InstaForex Analysis

Instant Trading EU Ltd. is the CFD broker operating under the brand instaforex.eu, regulated by CySec with license number 266/15.

Besides CySEC, Instant Trading EU Ltd. is also supervised by the Czech National Bank (CNB), the Slovak National Bank (SNB), and the Polish Financial Supervision Authority (KNF). InstaForex.eu has branches in the Czech Republic, Slovakia, and Poland, where it provides support in local languages. InstaForex.eu is a member of the Investor Compensation Fund (I.C.F) which is an additional security for the client's funds.

InstaForex.eu offers access to around 2,500 instruments (CFDs in Stocks, ETFs, IPOs, Indices, Commodities, Forex, Cryptocurrencies, US Synthetic Stocks) and the MT4 and MT5 platforms,trading accounts in EUR, USD, PLN, CZK, GBP.

More information at: www.instaforex.eu

Follow InstaForex.eu on:

Twitter Facebook YouTube

 

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.88% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.